The Bush administration is planning to lend motor manufacturer GM $9.4 billion. Chrysler is going to get $4billion. The hope is that this money will allow them to get over a short term finance hump and according to the Los Angeles Times: “The government can demand that the loans be repaid if negotiations among parties — including dealers, unions, stockholders, bondholders and suppliers — fail to lead to a new business structure that is deemed viable.”

Right thinking people will not give a tuppeny f~#k about the bondholders and stockholders. What is at the heart of the plan seems to be a pretty resolute intention to smash up the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW). The odd thing is that President Ron Gettelfinger doesn’t seem to mind that much. His grand strategy is that “We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed.” That could look a plan on a dark night if you squint a bit.

It’s a pretty stock left response to say “we won’t pay for their crisis”, or somesuch. This is Gettelfinger’s view too. He doesn’t pay for the crisis. His members do. The Los Angeles Times reports of the UAW’s 2007 negotiations that it ” introduced a two-tier contract to pay new hires $15 an hour (instead of $28) with no defined pension plan and dramatic cuts to their health insurance. In addition, the UAW agreed that healthcare benefits for existing retirees would be transferred from the auto companies to an independent trust. With the transferring of the healthcare costs, the labor cost gap between the Big Three and the foreign transplants will be almost eliminated by the end of the current contracts.”

The Bush bailout includes cuts to car workers’ salaries and pension provisions and ties in with the manufacturers’ ambitions to push down wages in the industry. These are all part of the negotiations. In his Times article Bruce Raynor, the general president of Unite Here, cites a internal report from Toyota which set the company the objective of ducking out of nationally agreed wage settlements and paying a salary pegged to average earnings in a factory’s locality. Raynor says that in Kentucky where Toyota currently pay $30 per hour this mean mean a cut to $12.64 per hour. Serious surplus value for the company.

The odd thing is that labour costs are only about 10% of producing a car in the United States. By way of comparison employee costs were 71% of Goldman Sachs overheads and 60%+ in the financial sector in New York. Apart from restrictions on the use of private jets by top executives the issue of salaries, working conditions and pensions barely figured in the bailouts of the financial sector in the United States and Bernard Madoff is even allowed bail. It is self evident that the motor companies and the leadership of the Republican Party want to use the twilight of Bush’s presidency to score a huge victory over a strongly unionised sector of the American working class. With leadership like that being provided by brother Gettelfinger it looks like it’s in easy reach.

Let’s conclude with the obvious ecosocialist points. This situation offers an opportunity to reassess the role of the private car in an advanced society. The existing capacity could be used to produce efficient, cheap less polluting public transport vehicles. Instead of subsidising the making of SUVs the loans could be used to pay for research into alternatives to petrol and agro-fuels.